The new VAT for housing in 2024: how much do you pay and who benefits from the reduced rate
Find out everything you need to know about the new reduced VAT rate, what are the conditions that must be met to benefit from the 9% VAT, but also when you pay 5% or 19% VAT for real estate.
During 2023, Law no. 296/2023 was adopted on the amendment of the VAT for real estate, which entered into force the following year. Thus, 2024 was the year that brought changes to the VAT for the real estate market - from January 1, 2024, the VAT rate being 9%. Along with this change, the conditions necessary to benefit from it were also adjusted.
Among the main changes is the increase in VAT for apartments, houses and other real estate purchases. Specifically, the 5% rate was increased to 9% and the conditions that must be met in order to benefit from the new 9% VAT on real estate were established.
Conditions for benefiting from the 9% VAT
The 9% VAT on real estate applies only under certain conditions. Anyone who wants to purchase a home and wants to benefit from a reduced VAT must check the following criteria:
To purchase a home with a value of less than 600,000 lei, excluding VAT;
The home must have a usable area of no more than 120 sq m, without taking into account household annexes;
Not to have previously benefited from the reduced VAT rate for the purchase of a home.
Only individuals can benefit from the 9% VAT rate. It is also important to mention that for the new 9% VAT rate on apartments, the total area is not taken into account, but only the usable area.
In other words, as long as the living space does not exceed 120 sq m, the reduced rate continues to apply. The usable area refers to the bedrooms, living room, kitchen, hallway and other living spaces, while the balcony, terrace or garden are part of the total built area and are considered annexes. The usable area is defined by Law no. 114/1996, while household annexes are defined by Law no. 50/1991.
The 9% VAT rate applies only to housing purchases that are subject to VAT by law or by option, made directly from real estate developers or other legal entities.
It is important to note that the new 9% VAT rate applies only to housing that was purchased after 2024.
When is 19% VAT applied to real estate
A standard VAT of 19% is applied to any type of purchase in Romania. In the case of real estate purchases, the 19% VAT rate applies as follows:
Homes with a value greater than 600,000 lei;
Homes with a usable area greater than 120 sq m;
Individuals who have already benefited from the reduced 9% VAT rate for another home.
Purchases made by legal entities cannot benefit from the 9% VAT rate even if the eligibility criteria applicable to individuals mentioned above (regarding value, area, etc.) are met.
What is new in the 2024 VAT for real estate and what benefits remain
The most notable change is the increase in the reduced rate from 5% to 9% for the purchase of a new home. Although the rate has been increased, it remains comparatively lower than the standard rate of 19%. This may contribute to a certain extent to supporting the purchase of new homes among the population.
As for the other eligibility conditions, they remain the same as before. It is about the purchase of a new home, which does not exceed the maximum value and usable area. Also, the beneficiary must be at the first purchase of a property that meets the conditions for the reduced VAT rate of 9%.
The purchase of a home is a very important decision, so you need to be as well informed as possible from the very beginning. The cost of the home, as well as the value of VAT but also of other related taxes and costs influence the budget you have. Check if VAT is included in the purchase price or if it is added separately. It will be paid when the sale-purchase contract is signed.
How much is VAT on Skia Imobiliare apartments
Skia Imobiliare offers you a varied offer of apartments developed by One United Properties. You can find apartments that can be purchased with a VAT rate of 9%, but also with a standard VAT rate of 19%.
The apartments are located in exclusive locations in Bucharest, as well as in Mamaia Nord and are built with attention to detail and quality materials. In addition, each real estate project emphasizes sustainability and responsibility towards the environment.
You can benefit from the new VAT rate on two-room apartments or studios located in residential complexes that offer you numerous amenities, as well as premium finishes, proximity to public transportation or other points of interest in the city.